Rural Business-Cooperative Service
Intermediary Relending Program
Program Description: This Rural Development program provides a loan to private nonprofit organizations, public entities and others (intermediary) to finance business facilities and community development projects in rural areas of 25,000 population or less. The RBS loan is used to establish or fund a revolving loan program to provide financial assistance to ultimate recipients for community development projects, establishment of new businesses or expansion of existing businesses, and saving and/or creation of jobs in rural areas.
Type of Assistance: The RBS loan is a direct loan made to public agencies, private non-profit corporations, Indian groups or Cooperatives (intermediary) to establish or fund a revolving loan program. The intermediary then makes loans from this revolving loan fund to private individuals, public or private organizations, or any other legal entity (ultimate recipient) for community development projects, establishment of new businesses or expansion of existing businesses, and saving and/or the creation of jobs in rural areas.
Eligibility Requirements: The intermediary must be a public agency, private non-profit corporation, Indian group or Cooperative with the legal authority necessary for carrying out the proposed loan purposes. Maximum initial Rural Development loan to intermediary is $2 million (loan amount will not exceed the amount expected to be re-lent within 12 months). Ultimate recipients may be private individuals, public or private organizations, or any other legal entity. The ultimate recipient business must be located in a town of less than 25,000 population. Maximum loan to any ultimate recipient generally is $150,000.
Interest Rate: The interest rate to an intermediary is 1%. Rates charged by intermediaries to ultimate recipients will be negotiated between the intermediary and the ultimate recipient, with lower rates encouraged.
Terms: The maximum term for the Rural Development loan to an intermediary is 30 years. Loan terms for intermediary loans to ultimate recipients are negotiated between the intermediary and the ultimate recipient.
Collateral: All loans must be adequately secured. Rural Development loans to intermediaries are secured by a lien on the IRP revolving fund. Security for intermediary loans to ultimate recipients is negotiated between the intermediary and ultimate recipient.
Contact: Applications from organizations for IRP loans are made at the Rural Development State Office. Funding selections are made in Washington, DC. For further information or a list of intermediaries with IRP loan funds available for ultimate recipient projects in Idaho, call (208) 378-5623.
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